Frontier and Spirit Mega-Merger Could Be Big News for RI International Airport

Frontier and Spirit Mega-Merger Could Be Big News for RI International Airport

The announcement on Monday that Frontier agreed to buy Spirit Airlines for $2.9 billion in cash and stock in a deal that would create “a discount-airline juggernaut” may be big news locally.

The combined company will create America’s 5th largest airline.

For Rhode Island’s International Airport — an airport that has had tremendous success attracting low-cost airlines — there could be an expansion of service.

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Presently, discount airlines Allegiant, Breeze, Frontier, and Sun Country all operate out of RI International. And, with cheaper parking -- the airport has a competitive advantage over Boston's Logan airport.

“This transaction is centered around creating an aggressive ultralow fare competitor to serve our guests even better,” Spirit President and Chief Executive Ted Christie said.

The companies valued the deal at $6.6 billion, including the assumption of net debt and operating leases.

“We are thrilled to join forces with Frontier to further democratize air travel,” said Christie. “This transaction is centered around creating an aggressive ultra-low fare competitor to serve our Guests even better, expand career opportunities for our Team Members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public. We look forward to uniting our talented teams to shake up the airline industry while also continuing our commitment to excellent Guest service.”

Frontier claims consumers will win with "more ultra-low fares to more places."

According to Frontier, the combined airline is expected to:

·         Deliver $1 billion in annual consumer savings.

·         Offer more than 1,000 daily flights to over 145 destinations in 19 countries, across complementary networks.

·         Expand with more than 350 aircraft on order to deliver more ultra-low fares.

·         Increase access to ultra-low fares by adding new routes to underserved communities across the United States, Latin America and the Caribbean.

·         Deliver even more reliable service through a variety of operational efficiencies.

·         Expand frequent flyer and membership offerings.

 

But not all are celebrating the deal.

CNN is reporting that "California Democratic Congressman Ro Khanna is shrugging off potential antitrust issues in the proposed $6.6 billion merger of low-cost carriers Spirit and Frontier Airlines. But he does have one other big concern."

"Look, the DOJ should review it," Khanna told CNN in a phone interview Monday. "But having flown Spirit just twice in my life, and both times having my bags lost, I can't imagine the consumer experience could get worse."